September 30, 2016 / 2:02 AM / 10 months ago

IFR Markets ForexWatch Asia Regional Daily Briefing

9 Min Read

SYDNEY, Sept 30 (IFR) - Market Briefs
    * Risk hit as Deutsche Bank dips 7%, traditional safe havens USTs, JPY & CHF
rise

    * US Q2 GDP growth revised up to +1.4%; Business investment up 1%, Cons
spending  revised  lower

    * US jobless claims rise less than expected, 254k vs 260k Rtrs f/c, 251k pvs

    * US Q2 PCE unched at 2%,/Core PCE unchanged at 1.8%, on target v Rtrs f/c

    * U.S. August pending home sales fall 2.4%  vs 0% Rtrs f/c, inventory
remains weak

    * Fed's Lockhart:  wants to see more improvement before hiking rates

    * Fed's Harker: backs December rate hike if economy stays on track

    * ECB's Nowotny: Europe not facing new banking crisis, EUR as a CCY was
never in danger

    * Euro zone econ sentiment much better than expected in Sept; 104.9 vs Rtrs
f/c 103.5

    * Iraq's OPEC revolt shows Saudi-Iran oil deal fragility, Iraq's Luaibi
complains about OPEC o/p estimates

    * Banxico lifts rate 50bps to 4.75%, will keep extremely vigilant on fx rate
7 pass-through to inflation



Macro Themes in Play
    * Markets down on German bank problems; Commerz cuts 20% of staff, halts
dividend; DB hit by Bloomberg story of counterparty withdrawals, stock falls 8%;
bonds, CHF in safe-haven bid, EURCHF lowest in 6 weeks

    * Rates lower, Eurodollar futures break out higher, market seeing bank
pressure as another reason for Fed not to tighten; DXY stuck

    * EUR unchanged despite bank turmoil, nobody has clue, coin toss; USDJPY up
but well off highs, Topix at 200 dma, break for first time in 2016 key to
further JPY weakness; Cable leaks lower on no news, back at trend support

    * AUD, CAD, EM lower on risk-off trade; MXN rate hike mitigates losses; oil
follows through higher even though OPEC details not decided until November;
Canadian long yields ignore crude rally, back below 1%


Looking Ahead - Economic Data (GMT)
    * 21:45  NZ  Building Consents                 Aug      -10.5%-prev

    * 23:30  JP  All H'hold Spding YY             Aug      f/c -2.5%, -0.5%-prev

    * 23:30  JP  All H'hold Spending MM        Aug      f/c -1%, 2.5%-prev

    * 23:30  JP  CPI, Core Nationwide YY       Aug      f/c -0.4%, -0.5%-prev

    * 23:30  JP  CPI, Overall Nationwide*       Aug      -0.4%-prev

    * 23:30  JP  Unemployment Rate                          Aug      f/c 3%,
3%-prev

    * 23:50  JP  Industrial output prelim mm   Aug      f/c 0.5%, -0.4%-prev

    * 00:00  NZ  NBNZ Business Outlook        Sep      15.5%-prev

    * 00:00  NZ  NBNZ Own Activity               Sep      33.7%-prev

    * 01:00  AU  HIA New Home Sales m/m   Sep     -9.7%-prev

    * 01:30  AU  Private Sector Credit*            Aug      0.4%-prev

    * 01:30  AU  Housing Credit*                    Aug      0.5%-prev

    * 01:45  CN  Caixin Mfg PMI Final            Sep      f/c 50.1, 50-prev

    * 05:00  JP  Construction Orders YY*         Aug      -10.9%-prev

    * 05:00  JP  Housing Starts YY*              Aug      f/c 7.1%, 8.9%-prev


Looking Ahead - Events, Other Releases (GMT)
    * 23:50  JP   BoJ will release summary of discussions at its rate review on
Sept 20-21, when it rebooted its policy framework and shifted its target to
interest rates from the pace of money printing


Currency Summaries
EUR/USD  
    * Choppy NY session, opens just above 1.1220, USD firms early & stocks lift

    * EUR/USD dives to 1.1197, EUR/JPY rallies near 114.20, EUR/USD runs up to
1.1250

    * Market concerns on Deutsch Bank increase, risk sours, JPY & CHF lift

    * EUR/JPY dives near 113.00 & EUR/CHF near 1.0830, EUR/USD follows

    * Oair touches 1.1204, slight bounce sees pair near 1.1215 late

    * EZ Sep inflation & US Aug consumption and Sep Chi. PMI are data risks due

 
USD/JPY 
    * Early follow-through JPY weakness on OPEC story rerisking reversed in NY

    * Oil was still up, but EZ banking concerns sent stocks, yields & USD/JPY
lower

    * The 101.84 session high stopped by the 21-DMA & daily Cloud base

    * Midday slide got back below the 200-HMA by 101 & o/n B/O point

    * EUR/JPY also got rejected by its 21-DMA and Cloud base w EZ bank woes

    * GBP/JPY shed all of its intraday gains. CHF/JPY the only real winner.

    * CHF/JPY also ran into its Cloud base: no Cloud B/Os there since Jun '15

    * JP Job, CPI, IP & Housing data on tap Friday 

 
USD/CHF
    * Franc broadly stronger on new round of risk-off flows centered on bank
woes

    * CHF was already better bid o/n as JPY's post OPEC deal fall favored CHF 

    * EUR/CHF fell from the Ldn open on rumors regarding counterparty risk

    * EUR/USD's post-EZ crisis bullish response to derisking  is starting to
break

    * New Sep lows in EUR/CHF & USD/CHF in NY afternoon 

    * SNB has been a buyer below 1.0800 in past, and will likely have to again

    * US data mixed. USD/JPY fell back w USD/CHF & stocks despite oil gains

 
GBP/USD   
    * GBP/USD moved steadily lower after putting in o/n high at 1.3059, on
dovish Shafik

    * Fears of 'hard Brexit' continue to weigh on GBP, as mkt expects more BoE
easing

    * Support at Sep 23 low at 1.2915 (dbl bottom), then 1.2865 Aug 15 low

    * Pair ends NorAm at 1.2970, GBP hit as DB drops near 8%, UK bank exposure
eyed

    * EUR/GBP rallies into NorAm close on DB angst, ends NY 0.8648, near high
0.8669

    * Support at 0.8610 10-DMA, then daily cloud top 0.8559, res 0.8700 upper
21-d Bolli

 
USD/CAD
    * USD/CAD 1.3048/3116, Noram 1.3059/3184, close 1.3140 (NY +40 pips)

    * Oil +0.9/1.3% (Brent/WTI) after OPEC deal statement 

    * Some skepticism on ability to execute after Iraq complaints 

    * DXY +0.12% (+0.08% NY); UST/CA 2Y sprd +1bp, 25.0; S&P -0.6% (-0.5% in NY)

    * CAD/JPY -0.18%, 76.85, AUD/CAD -0.11%, 1.0046; EUR/CAD 1.4744 +0.51% 

    * US GDP beat, home sales soft [page:2417] Fri Cda July GDP f/c +0.3%, PPI

 
AUD/USD     
    * Slide in Europe's morning sees 0.7650 neared, NY opens just above that
area

    * Steady ascent in early NY as risk rallies, stocks lift & AUD/JPY lifts
above 78.00

    * AUD/USD nears 0.7690, rally quickly reverses as mkt concerns on DB
increase

    * AUD/JPY dives toward 76.90, AUD/USD follows, takes out 0.7640/45

    * Low of 0.7624 made before any bounce takes hold

    * Daily techs favoring bears, RSI diverges on s-t high & bear engulfing
candle forms


NZD/USD
    * Heavy in Europe's morning, nears 0.7255, NY opens just above

    * Risk rallies early, JPY weakness sees NZD/JPY above 74.10, NZD/USD up to
0.7295

    * Rally pauses, no further gain, slide ensues as risk sours on DB worries

    * JPY rallies, NZD/JPY nears 73.00, NZD/USD dips below 0.7240

    * Pair just above day's low late in the session

    * Daily techs favor bears, RSI biased down & holds below 10-DMA

    * 0.7200/30 is key supt, if breaks suggest move towards 0.6950 is possible

 
LATAM
    * Banxico, as exp'd, hikes 50bps to 4.75%, despite falling growth risks
 

    * C.bank sees oil prices, the Fed and US elections as potential sources of
volatility

    * USD/MXN moves to flash high 19.6300, then settles near 19.4300 

    * Risk broadly exited as DB dips 7+%, safe havens UST, Yen & CHF rally

    * USD/BRL +0.75% to 3.2400, IMF says recession has slowed 

    * USD/CLP ends NorAm unched, copper flat as well, China PMI data on deck


 
Oil-linked currencies on edge with WTI by key pivots
WTI is toying with some longer-term, topside pivot points heading into week's
end in the wake of OPEC's pending production cut agreement. For the first time
since Aug 2014, WTI is above its 100-WMA, last at 47.41. A potential inverted
head and shoulders neckline from 2015 summer highs, now at 48.50, might also be
closed above Friday, given today's current high of 48.02. The head and shoulders
base pattern is reinforced by major, oversold bullish divergence buy signals
this year. If the reversal develops, the measured head and shoulders target at
64.65 will be accompanied by a 161.8% Fibo target at 64.22. More generally, a
50+ weekly close would suggest more faith in, or fear of, this pending OPEC
deal, with bullish implications for currencies like MXN, CAD, NOK, RUB and
bearish ones for JPY.  Charts: 1) tmsnrt.rs/2d8JACM &
 2) tmsnrt.rs/2daeBK4

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